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Friday: 2nd February 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 14 points.

The Australian share market is expected to start the day a bit lower after a mixed night for overseas stock markets and a flat session for commodities.

Wall Street is trading higher, as strong reports from Facebook and Microsoft led the technology sector higher and hawkish comments from the Federal Reserves lifted bank stocks.

Gold futures notched a second straight gain, finding support on the back of a weaker dollar even after the Federal Reserve said it expects inflation “to move up this year” in a sign it is likely to hike rates at its next meeting in March.

Overnight Summary

Each Market In Focus

The Australian share market is expected to start the day a bit lower after a mixed night for overseas stock markets and a flat session for commodities.
At 0700 AEDT on Friday, the share price futures index was down 14 points, or 0.23 per cent, at 6,022.
On Thursday, Australian shares posted their best daily gain in four months as investors anticipated strong half year earnings results for Australian companies.
The benchmark S&P/ASX200 index was up 52.4 points, or 0.87 per cent, at 6,090.1 points, with all sectors higher, with the exception of telcos.
In equities news on Friday, building products company, James Hardie, releases its third quarter results and Ruralco holds its annual general meeting.
In economic news, the official producer price index for December quarter is released, which measures the prices of goods and the farm or factory gate before costs, such as transport, are added.

Wall Street is trading higher, as strong reports from Facebook and Microsoft led the technology sector higher and hawkish comments from the Federal Reserves lifted bank stocks.
The technology sector was up 0.53 per cent. Its gainers included Apple, which is to report earnings after the bell, along with Alphabet and Amazon .
Strong reports from S&P 500 companies so far have pushed up analysts’ fourth-quarter profit growth estimate to 13.7 per cent, from 12 per cent at the start of the month, according to Thomson Reuters data.
Heading into the final hour of trade, the Dow Jones Industrial Average was up 33.32 points, or 0.13 per cent, at 26,182.71, the S&P 500 down 0.51 points, or 0.01 per cent, at 2,823.71 and the Nasdaq Composite was down 4.39 points, or 0.05 per cent, at
7,407.09.

Gold futures notched a second straight gain, finding support on the back of a weaker dollar even after the Federal Reserve said it expects inflation “to move up this year” in a sign it is likely to hike rates at its next meeting in March.
Analysts said the March hike is likely widely priced in to trading.
IRON ORE: $71.40 +0.03(March contract)

Oil prices rose as investors focused on signs of strong fuel demand and tighter supplies in a key U.S. storage hub, even as the country’s growing crude output loomed.
U.S. crude futures settled up $1.07 cents, or 1.65%, to $65.80 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 76 cents, or 1.1%, to $69.65 a barrel on ICE Futures Europe.

The dollar edged lower intraday, as strong economic data from overseas drew investors into the euro.
The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently down 0.1% at 83.13.
A key measure of eurozone manufacturing activity, the IHS Markit Eurozone Manufacturing PMI, showed a strong start to the year for the region. While key gauges such as growth in output and new orders eased from near-record highs at the end of last year, they remained among the best seen since the survey began in 1997, IHS Markit said in a report.
The solid results signaled that the eurozone’s recovery, which helped push the euro up 3.4% against the dollar in January, may have further to run. The euro was recently up 0.5% at $1.2475.
Australian dollar:
The Australian dollar is a bit weaker after a sluggish night on commodities markets, and a mixed night for overseas stock markets.
At 0635 AEDT on Friday, the local currency was worth 80.35 US cents, down from 80.43 cents on Thursday.

European shares fell for a fourth day, led lower by Danish drugmaker Novo Nordisk after its operating profit fell short of expectations.
In Europe, the STOXX 600 fell 0.59 per cent and the pan-regional FTSEurofirst 300 index lost 0.70 per cent.
“At currently high valuations for developed market equities, investors should tread cautiously in what remains a top-of-cycle environment, even if rising bond yields are more likely a headwind than a precursor to a crisis,” said Alastair George, chief strategist at Edison Investment Research.
MSCI’s gauge of stocks across the globe shed 0.04 per cent while stocks on Wall Street rose after spending much of the early session trading little changed.

Asian shares swung into negative territory on Thursday, erasing earlier gains, as a late retreat in Chinese stocks pulled the benchmark lower and as concerns about rising interest rates softened investor sentiment.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent, still wobbly after Tuesday’s 1.4 per cent fall, and pulling away from earlier increases.
In China, profit-taking ahead of the Lunar New Year holidays in mid-February, led to a correction, with Shenzhen shares shares hit the hardest, falling more than three per cent to six-and-a-half-month lows.
Japan’s Nikkei, a major underperformer in the past couple of weeks, rose 1.7 percent from a four-week low hit the previous day.
On Thursday, the S&P/NZX50 Index fell 58.14 points, or 0.69 per cent, to 8,383.87.

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